BRIEFING BY THE DEPARTMENT OF LABOUR TO THE PORTFOLIO COMMITTEE 9 OCTOBER 2012 Annual Report 2011/12...

BRIEFING BY THE DEPARTMENT OF LABOUR TO THE PORTFOLIO COMMITTEE

9 OCTOBER 2012

Annual Report 2011/12

Doc Id: 464695 1

TABLE OF CONTENTS

2

1. MANDATE

2. MEDIUM TERM STRATEGIC FRAMEWORK (MTSF) AND SERVICE DELIVERY OUTCOMES ALIGNED TO THE DOL STRATEGIC OBJECTIVES

3. KEY ASPECTS OF THE DOL STRATEGIC PLAN 2011/12, TARGETS AND PERFORMANCE

4. BUDGET ALLOCATIONS AND UTILISATION INCLUDING AUDIT FINDINGS

5. SHELTERED EMPLOYMENT FACTORIES

6. MANAGEMENT ACTION TO RESPOND TO AUDIT MATTERS

7. HUMAN RESOURCES

3

1. Mandate

VisionThe Department of Labour will strive for a labour market which is conducive to investment, economic growth, employment creation and Decent Work.

Mission

Regulate the South African labour market for a sustainable economy through:•Appropriate legislation and regulations•Inspection, compliance monitoring and enforcement•Protection of human rights•Provision of Employment Services•Promoting equity•Social and income protection•Social dialogue.

2. MTSF and Service Delivery Outcome 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives aligned to the Department of Labour’s strategic objectives

4

In this report, the Department reflects on its contribution to year three of the Medium-Term Strategic Framework (MTSF) 2009-2014 with a focus on the following Government service delivery outcomes:

Outcome 4: Decent employment through inclusive economic growth, and two other outcomes;

Outcome 11. Create a better South Africa and contribute to a better and safer Africa and World; and Outcome 12: An efficient, effective and development orientated public service and an empowered and inclusive citizenship.

2. MTSF and Service Delivery Outcome 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives - aligned to the Department of Labour’s strategic objectives -

continuescontinues

5

SERVICE DELIVERY OUTCOMES AND OUTPUTSSERVICE DELIVERY OUTCOMES AND OUTPUTS DoL STRATEGIC OBJECTIVESDoL STRATEGIC OBJECTIVES

4: Decent employment through inclusive economic growth Outputs: 4.1 Making our growth more labour absorbing4.2. Reducing youth unemployment4.3. Raising our international competitiveness4.4. Analysing the cost structure of the South African economy4.5. Reviewing support for small business4.6. Expanding our Public Works Programme

1: Contribution to employment creation 2: Promote equity in the labour market 3: Protecting vulnerable workers 5: Strengthening social protection 6: Promoting sound labour relations 7: Monitoring the impact of legislation

11: Creating a better South Africa and contributing to a better and safer Africa in a better world.

4: Strengthening multilateral and bilateral relations

12: An efficient, effective and developmentorientated public service and anempowered and inclusive citizenship Output: 12.1 Service delivery quality and access

8: Strengthening the institutional capacity of the Department

2. MTSF and Service Delivery Outcome 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives - aligned to the Department of Labour’s strategic objectives -

continuescontinues

6

• To achieve these objectives, the Department, in the 2011/12 financial year focused on the following strategic programmes

• Labour law amendments. • Rebuilding the Public Employment Services. • Implementation of Decent Work Country Programme.• Strengthening of Department of Labour inspectorate.• Reduce inequality and discrimination in the labour market

through effective compliance monitoring and enforcement of the Employment Equity Act.

• Improved access to income protection services (CF and UIF) including reintegration of workers into the labour market.

Branches/Programmes within the Department of Labour

Programme 1: Administration (ADMIN)

Programme 2: Inspections and Enforcement Services (IES)

Programme 3: Public Employment Services (PES)

Programme 4: Labour Policy and Industrial Relations (LP and IR)

7

3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance

8

OUTCOME 12: AN EFFICIENT, EFFECTIVE, AND DEVELOPMENT ORIENTED PUBLIC SERVICE AND AN EMPOWERED AND INCLUSIVE CITIZENSHIPStrategic Objective 8: Strengthening the institutional capacity of the Department

KEY PERFORMANCE KEY PERFORMANCE

INDICATORSINDICATORSANNUAL TARGETSANNUAL TARGETS PROGRESSPROGRESS

1. % of customer complaints attended to within 14 days of Receipt

90% within 14 days

98% (5 434 out of 5 517) were resolved within timeline

2. Percentage of women, youth and people with disability (PwD) employed in line with the EE Plan

34% women employed in Senior Management Service (SMS), 43% youth and 3% people with disability (PwD) employed in the Department

38.5% (32 out of 83 employees at Senior Management Service level) women are employed in Senior Management Service (SMS) as at 31 March 2012

40% (2 830 out of 7 057 filled posts) youth employed in the Department as at 31 March 2012

2.6% (184 out of 7 057 filled posts) of the employees in the Department are people with disabilities as at 31 March 2012.

3. Percentage of vacancy rate reduced with a specified period of time

Vacancy rate reduced to below 8% by 31 March 2012

The vacancy rate in the Department has been reduced to 7.28% (554 out of 7 611 posts) as on 31 March 2012.

3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues

9

OUTCOME 12: AN EFFICIENT, EFFECTIVE, AND DEVELOPMENT ORIENTED PUBLIC SERVICE AND AN EMPOWERED AND INCLUSIVE CITIZENSHIP

Strategic Objective 8: Strengthening the institutional capacity of the Department


INDICATORSINDICATORSANNUAL TARGETSANNUAL TARGETS PROGRESSPROGRESS

4. % of misconduct cases finalised within a prescribed period of time

70% of misconductcases finalised in line with applicable prescripts by31 March 2012

79% (216 out of 271 cases) of misconduct cases were finalised in line with the applicable prescripts as on 31 March 2012.

5. Exit and services transfer plan developed and implemented

Implementation of Exit and Services Plan

The Exit and Services Transfer Plan was developed and approved.


10

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 2: Promote Equity in the Labour Market


INDICATORSINDICATORSTARGETSTARGETS ACHIEVEMENTSACHIEVEMENTS

1. Inspect JSE listed companies and ordinary designated employers to achieve 80% compliance with EE legislation

10 000 workplaces inspected JSE (60 ) Designated (140) Procedural (9 800)

A total of 10 223 workplaces were inspected;•65 JSE listed companies inspected• 218 Designated employers inspected • 9 940 companies were inspected procedurally Refer to page 39 of the Annual Report for Provincial breakdown.


11

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 3: Protecting vulnerable workers



1. Inspect 130 000 workplaces to achieve 80% compliance rate

130 000 inspections with 80% compliance rate

172 300 routine inspections were conducted and 74% (123 181) compliance achieved

The Limpopo figure of 14 890 (target) was omitted in the Annual Report.


12




2. Conduct blitz inspections in targeted sectors

Conduct 15 000 blitz inspections in the targeted sectors

21 394 blitz inspections conducted

Refer to page 40 and 41 of the Annual Report for Provincial and Sector breakdown


13




3. Settle at least 70% of received labour related complaints within 14 days at Registration Services

Settle 70% of received complaints within 14 days

135 807 labour related complaints were received and 110 610 (74%) settled within 14 days


14

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH

Strategic Objective 5: Strengthening Social Protection



1. Reduce incidents in the following high risk sectors by conducting audits, do blitzes and hold 1 seminar per year:- Iron and Steel,- Construction,- Chemical and- Agriculture/forestry)

Establish a baseline byconducing at least:• 20 audits persector• Blitz per sector• 1 seminar per year

722 inspections conducted in the Iron and Steel Sector, 1003 Inspections conducted in the Construction Sector, 144 inspections conducted in the Chemical Sector and 1338 inspections conducted in Agriculture and Forestry Sector

Refer to pages 43 and 44 of the Annual Report

2. Conduct inspections in the identified industries exposing workers to silica dust

200 workplaces inspected in order to reduce exposure by at least 2%

213 workplaces were inspected

The inspections conducted were the first. Follow-up inspections will continue to determine the level of reduction to exposure.

Prov.Target Actual

Deviance

GP 200 213 13NATIONAL 200 213 13

3. Key Aspects of the Department of Labour’s Strategic Plan 2011/12 - Targets and Performance

15


Strategic Objective 1: Contribution to employment creation

KEY KEY

PERFORMANCE PERFORMANCE

INDICATORSINDICATORS

TARGETSTARGETS ACHIEVEMENTSACHIEVEMENTS

1. Number of registered job-seekers on the Employment Services for South Africa system per year

600 000 reportingjob-seekers registered on the System

Work-seekers registered : 553 883

Prov. Target Actual Deviance

EC 90000 36227 53773

FS 66000 39474 26526

GP 120000 146865 +26865

KZN 78000 104718 +26718

LP 54000 61002 +7002

MP 60000 46317 13683

NC 36000 23323 12677

NW 48000 21081 26919

WC 48000 74876 +26876

NATIONAL 600 000 553 883 46117


16



KEY KEY




2. Number of job-seekers Registered on the system assessed and profiled

50% job-seekers registering on the system are assessed and profiled within 60 days of Registration

222 956 (40%) of the 553 883 job seekers registered on the system were assessed and profiled

Prov. Target Actual Deviance

EC 18114 18149 +35

FS 19737 17222 2515

GP 73432 44884 28548

KZN 52359 51542 817

LP 30501 13922 16579

MP 23158 38093 +14935

NC 11662 4154 7508

NW 10541 16373 +5832

WC 37438 18617 18821

NATIONAL 276942 222956 53986


17



KEY KEY




3. Number of job-seekers placed/referred to opportunities

450 000 job-seekers placed/referred to opportunities

96 505 referred/placed into opportunities


18





4. Number of employers registering vacancies on ESSA

2 000 2 475 companies registered vacancies

Prov. Target Actual DevianceEC 300 361 +61FS 220 260 +40GP 400 578 +178KZN 260 274 +14LP 180 212 +32MP 200 152 48NC 120 227 +107NW 160 187 +27WC 160 224 +64

NATIONAL 2000 2475 +475


19





5. Number of private employment agencies registered

1500 1 162 PEAs were registered

Prov. Target Actual DevianceEC 224 132 92FS 160 57 103

GP 300 491 +191KZN 196 211 +5LP 136 76 60MP 152 69 83

NC 92 32 60NW 120 30 90WC 120 64 56NATIONAL 1500 1162 338


20





6. Number of jobs saved through social plan intervention

20 000 15 165 jobs saved

7. Increased sales of goods from Service Products leading to more intake of people with disabilities into SEF

30% in sales leading to 500 more people with disabilities employed in SEF subject to Government departments placing 30% of their orders from SEF

Only 0.67% increase in sales was recorded. No additional people with disabilities were employed. Only 1.47% increase in sales/orders was placed by government departments

Insufficient orders placed by government departments

8. Number of people from designated groups placed in training and income generating opportunities- Youth, Women, PWD

100 000 Youth 50 000 Women 1 000 PWD

28 339 Youth 17 055 Women 608 PWDLow skills levels of candidate and insufficient opportunities registered

Refer to page 51 for Provincial breakdown


21

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 2: Promote Equity in the Labour Market



1. Employment Equity Act (EEA) and its Regulations Amended

Amended EEA promulgated

NEDLAC negotiations on the Employment Equity Bill was postponed to commence in April 2012 due to prolonged negotiations on the LRA and BCEA Bills. VS: Copy of document outlining the Amendment themes

2. Code of Good Practice and Technical Assistanceguidelines on HIV and AIDS reviewed andAmended

HIV and AIDS Code and Technical assistance Guidelines amended

The Code on HIV and AIDS and the World of Work reviewed and finalised by 28 March 2012 and Technical Assistance guidelines finalised in June 2012.VS: Copy of the Revised Code on HIV and AIDS and the World of Work

3. Income Differentialsassessed to determine race and genderdisparities in salaries

60 58 Income Differentials assessed to determine race and gender disparities in salaries


22


Strategic Objective 3: Protecting Vulnerable Workers



1. BCEA amended Amended BCEA promulgated

Bills were approved by Cabinet and submitted to Parliament. Information sharing sessions conducted country wide

2. Review existing sectoral determination

Publish an amended SD for: Civil Engineering, Taxi, Contract Cleaning,Domestic Workers, Farm Workers, Wholesale and Retail, Forestry

Five (5) Sectoral determinations reviewed. They are the following;

•Taxi published on 27/06/11 GG 34392•Contract Cleaning published 28/11/11 GG 34798•Domestic published on 28/11/2011 GG 34797•Farm Worker published 18/01/2012 GG 34947•Forestry worker published 18/01/2012 GG 34946


23

OUTCOME 11: CREATE A BETTER SOUTH AND CONTRIBUTE TO A BETTER AND SAFER AFRICA AND WORLD Strategic Objective 4: Strengthening bilateral and multilateral relations



1. Ensure compliance with ILO’s constitutional requirements in terms of Article 19 and 22 of the Constitution of the ILO.

Compile and submit reports in consultation with programmes and other departments on South Africa’s compliance in law, policy and practice.

Article 19 and 22 reports submitted to the ILO

-Two (2) reports with recommendations of Article 19 and six (6) reports from Article 22 were submitted.

Refer to page 62.


24

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 6: Promoting Sound Labour Relations



1. Extend collective agreements within 90 days

18 collective agreements published within 60 days of receipt

24 collective agreements

Average turnaround time: 57 days

2. Decision to register new labour organisationstaken within 90 days

90 days 144 Average turnaround time: 104 days


25

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 7: Monitoring the impact of legislation

KEY KEY

PERFORMANCPERFORMANC

E INDICATORSE INDICATORS


Annual Labour Market Review report developed and disseminated

Four (4) Annual Labour Market Review report developed and disseminated

(100%) Four annual labour market were produced and published by Sept 2012. These include:1.Industrial Action report 2011: It provides a trend analysis on industrial disputes in the country.2.Annual Labour Market Bulletin: It provides a general overview of key indicators regarding the performance of the SA economy, labour force and wage agreements in the financial year 2011/123.Annual Administrative Statistics report: It presents data series in the last 12 months of 2011. It considers only selected key indicators to assess progress made by each branch within the DoL4.Job Opportunity and Unemployment in the SA labour market: It examines the deficiency in the demand and supply of labour based on the analysis of vacancies and unemployment insurance data in the financial year 2011/12.


26

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 7: Monitoring the impact of legislation



The impact of the Department’s Strategic Plan on stated goals and objectives researched and reported on

Implementation of RME agenda 2 continues with the following projects.1.Evaluation of the NSDS II2.UIF noncompliance in the taxi, domestic and catering sectors3.Assessment of the registration, recruitment and selection services in ESSA

1. The following RME 2 projects were completed, submitted to the Minister and disseminated through research seminars:

Evaluation of the NDSD II, UIF Client satisfaction survey, UIF noncompliance in the taxi, domestic and catering

sectors, Assessment of registration, recruitment and selection

services in ESSA

4. Budget Allocations and Utilisation per Main 4. Budget Allocations and Utilisation per Main Division of the VoteDivision of the Vote

27

Final Actual Expenditure

Appropriation Expenditure as % of

final appropriation

R'000 R'000 R'000 R'000 R'000 R'000 %

1. ADMINISTRATION

Current payment 580 743 - 9 234 589 977 589 977 - 100.0%

Transfers and subsidies 255 - 515 770 770 - 100.0%

Payment for capital assets 117 457 - (1 844) 115 613 112 850 2 763 97.6%

Payment for financial assets - - 673 673 673 - 100.0%

698 455 - 8 578 707 033 704 270 2 763

2. INSPECTION AND ENFORCEMENT SERVICES

Current payment 389 091 (10 000) (4 014) 375 077 375 077 - 100.0%

Transfers and subsidies 199 - 384 583 583 - 100.0%

Payment for capital assets - - 89 89 89 - 100.0%

Payment for financial assets - - - - - - 0.0%

389 290 (10 000) (3 541) 375 749 375 749 -

3. PUBLIC EMPLOYMENT SERVICES

Current payment 196 168 - (4 137) 192 031 192 031 - 100.0%

Transfers and subsidies 128 391 10 000 292 138 683 138 158 525 99.6%

Payment for capital assets 250 - 1 755 2 005 2 005 - 100.0%


324 809 10 000 (2 090) 332 719 332 194 525

4. LABOUR POLICY AND INDUSTRIAL RELATIONS

Current payment 107 050 (4 095) (2 966) 99 989 93 427 6 562 93.4%

Transfers and subsidies 497 422 4 095 19 501 536 501 441 95 100.0%

Payment for capital assets 357 - - 357 41 316 11.5%


604 829 - (2 947) 601 882 594 909 6 973

Subtotal 2 017 383 - - 2 017 383 2 007 122 10 261 99.5%

Appropriation per programme

Vote 18- LABOURAppropriation Statement

for the year ended 31 March 2012

2011/12

Adjusted Appropriation

Shifting of Funds

Virement Variance

4. Budget Allocations and Utilisation per Main 4. Budget Allocations and Utilisation per Main Division of the VoteDivision of the Vote

28

AdjustedAppropriation

Shifting of Funds

Virement Final

Appropriation Actual

Expenditure Variance

Expenditure as % of final

appropriation R'000 R'000 R'000 R'000 R'000 R'000 %

Current payments

Compensation of employees 786 312 (11 195) (16 625) 758 492 757 883 609 99.9%

Goods and services 486 740 (2 900) 14 712 498 552 492 599 5 953 98.8%

Interest and rent on land - - 30 30 30 - 100.0%

Transfers & subsidies

Provinces & municipalities 12 - 39 51 51 - 100.0% Departmental agencies & accounts 542 184 - - 542 184 542 183 1 100.0% Foreign governments & international organisations 10 211 4 095 - 14 306 14 211 95 99.3%

Non-profit institutions 73 258 10 000 - 83 258 82 734 524 99.4%

Households 602 - 1 171 1 773 1 773 - 100.0%

Payment for capital assets

Buildings & other fixed structures 3 996 - 575 4 571 4 571 - 100.0%

Machinery & equipment 114 068 - (575) 113 493 110 414 3 079 97.3%

Payment for financial assets - - 673 673 673 - 100.0%

Total 2 017 383 - - 2 017 383 2 007 122 10 261 99.5%

2011/12 Appropriation per Economic classification

4. AUDIT FINDINGS – 2011/12

29

Qualification - None

Emphasis of Matter - None

Other Findings: Predetermined Objectives:

• Performance targets not specific (25% of PES priorities)

• Performance targets not specific (28% of IES)

• Performance indicators not well defined (33% of IES)

Procurement and contract management:Goods and services of a transaction value above R500 000 were procured without inviting competitive bids The Accounting Officer did not report the deviation from normal procurement processes to National Treasury and the Auditor General.Employees of the Department performed remunerative work outside their employment without written permission from the relevant authority.

4. AUDIT FINDINGS – 2011/12

30

Human resource management :Funded vacant posts were not filled within 12 months and vacant positions in the department were not advertised within six months.

Expenditure Management:Contractual obligations and money owed by the department were not settled within 30 days.

5. FINANCIAL MANAGEMENT OF SEF

31

SHELTERED EMPLOYMENT

FACTORIES (SEF)

5. FINANCIAL MANAGEMENT OF SEF

32

2011/12 2010/11

Revenue 50,280,045 49,910,548 Cost of sales (36,352,021) (35,645,461)

Gross Profit 13,928,024 14,266,087

Other revenue 64,266,279 70,212,973 Operating expenses (89,999,434) (86,546,373)

Operating (loss) / profit (11,805,131) (2,068,313)

Investment income 694,288 13,516 Finance costs (985,936) (21,638)

Loss for the year (12,096,779) (2,076,435)

Other comprehensive income - -

TOTAL COMPREHENSIVE INCOME / (LOSS) (12,096,779) (2,076,435)

SHELTERED EMPLOYMENT FACTORIESSTATEMENT OF COMPREHENSIVE INCOME

AS AT 31 MARCH 2012

5. AUDIT MATTERS OF SEF

33

Qualification - None

Emphasis of Matter -Financial sustainability / going concern:•The entity is unable to operate as a going concern Material losses:•The entity disclosed material losses amounting to R1 006 852 and R130 374 due write down of inventory and criminal conduct by fraudsters, respectively.Irregular expenditure incurred:•SEF incurred irregular expenditure due to the lack of Supply Chain Management processes.

5. AUDIT MATTERS OF SEF

34

Compliance with laws and regulations

Procurement and contract management: •Goods and services of a transaction value above R500 000 were procured without inviting competitive bids •Consultants were appointed to render services for which there was sufficient time to recruit people to perform the work.•Employees of the entity performed remunerative work outside their employment without written permission from the relevant authority

6. MANAGEMENT ACTION TO RESPOND TO AUDIT

35

• The Department, including SEF, has developed a

Management Action Plan to address all audit

findings/queries.

• Progress reports are provided to Management Committees

and the Audit Committee.

• Follow-ups are performed during the year by Internal Audit.

7. HUMAN RESOURCES – Staff compliment

36

Programme No. of posts No. of posts filled Vacancy RateNumber of posts filled

additional to the establishment

Administration(Corporate Services)

391 352 10.1 0

COO

5 791 5 400 6.8 95

PES 81 42 48.2 1

LP and IR 123 111 9.8 11

IES 59 48 18.6 5

Social Insurance

UIF: 455CC : 711

UIF: 421CC : 683

7.53.9

UIF: 25CC : 418

Total *7 611 7 057 7.3 555

7. HUMAN RESOURCES – Employment status

37

7. HUMAN RESOURCES – Equity by Occupational Band

38

Occupational BandsMale (44%) Female (56%)

African Coloured Indian White African Coloured Indian White Total Top Management 5 1 0 0 3 0 0 0 9Senior Management 34 4 3 4 24 1 0 3 73Professionally qualified and experienced specialists and mid-management

294 26 20 29 291 27 6 65 758

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

746 84 34 72 795 108 40 255 2134

Semi-skilled and discretionary decision making

1371 172 39 64 1724 243 42 201 4083

Unskilled and defined decision making

84 12 1 4 111 14 0 1 0

Total 2534 299 97 173 2948 393 88 525 7057

CONCLUSION

39

The Department of Labour has appreciated the tenable successes and acknowledged some of the challenges facing the organisation. And, we continue in our strides to address these challenges.

The Department received its second unqualified audit opinion consecutively. The Sheltered Employment Factories (SEF) obtained its first unqualified report in years. Issues raised by the Auditor General are being corrected and improvements in the control environment are on an on-going process.

Chairperson, the Department has significantly improved its internal efficiencies and focuses on service delivery; that is the reason for changes to the labour legislations are recommended.

Thank You…

40

BRIEFING BY THE DEPARTMENT OF LABOUR TO THE PORTFOLIO COMMITTEE 9 OCTOBER 2012 Annual Report 2011/12...

Documents

Transcript of BRIEFING BY THE DEPARTMENT OF LABOUR TO THE PORTFOLIO COMMITTEE 9 OCTOBER 2012 Annual Report 2011/12...